/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/220824.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Wednesday, August 24, 2022, Vol. 25, No. 163 Headlines A U S T R A L I A BOOMER HOME: Placed in Administration; Seeks Recapitalization CA PLUMBING: First Creditors' Meeting Set for Sept. 1 CORRECT AIR: First Creditors' Meeting Set for Aug. 30 FP TURBO 2021-1: Moody's Upgrades Rating on Class E Notes to Ba1 JOHN WAYLAND: First Creditors' Meeting Set for Aug. 31 MOBILIA GROUP: First Creditors' Meeting Set for Aug. 31 MR YUM: Startup to Cut 17% of Workforce PEPPER PRIME 2022-2: S&P Assigns Prelim. B+ Rating on F Notes SOCIAL ENERGY: First Creditors' Meeting Set for Aug. 31 C H I N A BRIGHT SCHOLAR: Moody's Withdraws 'B2' Corporate Family Rating KUN PENG: Incurs $690,000 Net Loss in Third Quarter SEAZEN COMPANIES: S&P Lowers ICR to 'BB', Outlook Negative I N D I A 10I COMMERCE: Files for Bankruptcy Protection ANANDALOK HOSPITAL: ICRA Keeps D Debt Ratings in Not Cooperating BHALKESHWAR SUGARS: CRISIL Keeps D Ratings in Not Cooperating BIYANI SHIKSHAN: CRISIL Keeps D Debt Ratings in Not Cooperating BUSH TEA: CRISIL Keeps D Debt Ratings in Not Cooperating Category CHEM STAR: CRISIL Keeps D Debt Rating in Not Cooperating Category DEEPA DEVELOPERS: ICRA Keeps D Debt Ratings in Not Cooperating DHARMRAJ ALUMINIUM: CRISIL Keeps D Debt Rating in Not Cooperating FSD BUILDING: CRISIL Keeps D Debt Ratings in Not Cooperating FUTURE RETAIL: Lenders Submit Loan Claims of US$2.64 Billion KRISHNAAM MOBILE: CRISIL Keeps D Debt Ratings in Not Cooperating LOK ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating MA CHANDI: CRISIL Keeps D Ratings in Not Cooperating Category MADHAVA HYTECH: CRISIL Keeps D Debt Ratings in Not Cooperating MSR ENTERPRISES: CRISIL Keeps D Debt Ratings in Not Cooperating NHS INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating OMEGA PREMISES: CRISIL Reaffirms B Rating on INR9.39cr Disc. Loan PRASAD SUGAR: CRISIL Keeps D Debt Ratings in Not Cooperating PRAVEEN ELECTRICAL: CRISIL Keeps D Ratings in Not Cooperating S. RASIKLAL: CRISIL Keeps D Debt Ratings in Not Cooperating SAEL RG1: Fitch Withdraws BB(EXP) Rating on New USD Notes SARIN'S: CRISIL Reaffirms B+ Rating on INR0.75cr Demand Loan SETCO AUTO: ICRA Hikes Rating on INR215cr NCD from D SR CYLINDERS: CRISIL Keeps D Debt Ratings in Not Cooperating TRISTAR INTERCONTINENTAL: ICRA Keeps D Ratings in Not Cooperating J A P A N MITSUBISHI HEAVY: Supreme Court Yet to Rule on Liquidating Assets MITSUBISHI MOTORS: S&P Affirms 'BB' LT ICR & Alters Outlook to Pos. N E W Z E A L A N D ARMSTRONG DOWNES: Playground Won't Open in Time for Summer AUBREY EDWARD: Creditors' Proofs of Debt Due on Sept. 15 CORRECTIVE BUILDING: Creditors' Proofs of Debt Due on Sept. 20 JDS BUILDING: Court to Hear Wind-Up Petition on Aug. 25 LOMAS TRUSTEES: Creditors' Proofs of Debt Due on Sept. 15 NICOLL GROUP: Court to Hear Wind-Up Petition on Sept. 8 QUEST INSURANCE: A.M. Best Affirms B(Fair) Fin. Strength Rating WHITE SWAN: Creditors' Proofs of Debt Due on Sept. 15 P A K I S T A N PAKISTAN: CB Rates at 15%, To Closely Watch Inflation V I E T N A M DAT XANH: Fitch Affirms 'B' IDR & Then Withdraws Rating - - - - - ================= A U S T R A L I A ================= BOOMER HOME: Placed in Administration; Seeks Recapitalization ------------------------------------------------------------- Your Mortgage reports that Perth-based Boomer Home Loans, which officially launched early this year, is seeking recapitalisation following the withdrawal of planned financing from an institutional funder. According to Your Mortgage, KordaMentha partner Richard Tucker, who was appointed voluntary administrator to the Boomer Home Loans Group along with another partner Kate Conneely, said the institutional funder had been in "very advanced negotiations" with the fintech for the past eight months. "There are excellent growth prospects for Boomer, given the demographic trends in Australia - the company has received significant interest in its products since launching them to market in May," the report quotes Mr. Tucker as saying. Your Mortgage relates that Mr. Tucker said the priority at the moment is to open the table for "urgent expressions of interest" for the recapitalisation of the group. "Boomer is a distinctive brand that offers a niche service other lenders are unable to bring. Given the amount of capital in the global markets, we believe Boomer will provide an attractive platform for capital to find a home in a tier 1 jurisdiction with tier 1 capital." Boomer was set to disrupt the traditional lending market by becoming the first Australian lender to specialise in home loans for over-55s. Prior to its launch in April, Boomer said it has raised over $13 million in capital from investors comprising of property management fintech entrepreneur Jindou Lee from HappyCo, former Fortescue Metals Group Chief Financial Officer Stephen Pearce, and former BNK Bank CEO Simon Lyons. Boomer aims to address the challenges faced by retiring Australians - it complements the recently relaunched Home Equity Access Scheme by the federal government, which enables older Australians to draw a fortnightly payment using the equity in their home. Your Mortgage adds that Boomer Home Loans CEO Scott Phillips said the gap in financial services for people aged over 55 was a significant national problem. "Millions of Australians enter retirement with the equity in their home being their most valuable asset and not enough in savings or super to support another 40 years of living costs, while many also commence retirement still paying off their home loan," he said in a statement earlier this year. "We believe that Australians over 55 deserve a better deal. They deserve a home loan lender that not only understands their unique needs but will help them plan and manage their finances in the lead-up to, and throughout, retirement." Richard Tucker and Kate Conneely of KordaMentha were appointed as Administrators of the Boomer Home Loans Group on Aug. 15, 2022. CA PLUMBING: First Creditors' Meeting Set for Sept. 1 ----------------------------------------------------- A first meeting of the creditors in the proceedings of CA Plumbing Pty Ltd will be held on Sept. 1, 2022, at 11:00 a.m. via virtual meeting technology. Con Kokkinos of Worrells was appointed as administrator of the company on Aug. 22, 2022. CORRECT AIR: First Creditors' Meeting Set for Aug. 30 ----------------------------------------------------- A first meeting of the creditors in the proceedings of Correct Air Services Pty Ltd will be held on Aug. 30, 2022, at 10:00 a.m. via teleconference. Sule Arnautovic and John Vouris of Hall Chadwick were appointed as administrators of the company on Aug. 22, 2022. FP TURBO 2021-1: Moody's Upgrades Rating on Class E Notes to Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings on eight classes of notes issued by two FP Turbo Series ABS. The affected ratings are as follows: Issuer: FP Turbo Series 2019-1 Trust Class C Notes, Upgraded to Aaa (sf); previously on Dec 21, 2021 Upgraded to Aa1 (sf) Class E Notes, Upgraded to Aa1 (sf); previously on Dec 21, 2021 Upgraded to A1 (sf) Class F Notes, Upgraded to A2 (sf); previously on Dec 21, 2021 Upgraded to Ba1 (sf) Issuer: FP Turbo Series 2021-1 Trust Class B Notes, Upgraded to Aaa (sf); previously on Dec 21, 2021 Upgraded to Aa1 (sf) Class C Notes, Upgraded to Aa2 (sf); previously on Dec 21, 2021 Upgraded to A1 (sf) Class D Notes, Upgraded to A1 (sf); previously on Dec 21, 2021 Upgraded to A3 (sf) Class E Notes, Upgraded to Ba1 (sf); previously on Mar 18, 2021 Definitive Rating Assigned Ba2 (sf) Class F Notes, Upgraded to Ba3 (sf); previously on Mar 18, 2021 Definitive Rating Assigned B1 (sf) RATINGS RATIONALE The upgrades were prompted by an increase in note subordination available for the affected notes and the good performance of the underlying collateral pools to date. FP Turbo Series 2019-1 Trust Following the July 2022 payment date, the note subordination available for the Class C, Class E and Class F Notes has increased rapidly to 36.9%, 30.3% and 19.4%, respectively, from 26.3%, 18.7% and 12% at the time of the last rating action for these notes in December 2021. As of June 2022, 0.7% of the outstanding pool was 30-plus day delinquent, and 0.1% was 90-plus day delinquent. The portfolio has incurred 0.005% (as of % of original balance) of losses to date, which have been covered by excess spread. Based on the current portfolio characteristics and historical performance data, Moody's has updated the haircuts to the residual value cash flow: Aaa haircut of 38.5%, Aa1 haircut of 30.8% and A2 haircut of 24.5%. FP Turbo Series 2021-1 Trust Following the July 2022 payment date, the note subordination available for the Class B, Class C, and Class D Notes has increased to 24.2%, 18.7% and 16.1%, respectively, from 18.9%, 14.6% and 12.6%, at the time of the last rating action for these notes in December 2021. Note subordination available for the Class E and Class F Notes has increased to 10% and 7.9%, respectively, from 6.3% and 5%, at closing. As of June 2022, 0.6% of the outstanding pool was 30-plus day delinquent, and 0.1% was 90-plus day delinquent. The portfolio has incurred 0.01% (as of % of original balance) of losses to date, which have been covered by excess spread. Based on the current portfolio characteristics and historical performance data, Moody's has maintained the haircuts to the residual value cash flow: Aaa haircut of 38.5%, Aa2 haircut of 29.4%, A1 haircut of 26%, Ba1 haircut of 17.3% and Ba3 haircut of 13.5%. The transactions are Australian cash securitisation of operating, novated and finance leases extended to Australian government and statutory corporations, corporates, small and medium-sized businesses and their employees. The leases are secured by passenger cars, commercial vehicles and equipment. The principal methodology used in these ratings was "Moody's Global Approach to Rating Auto Loan- and Lease-Backed ABS" published in July 2022. Factors that would lead to an upgrade or downgrade of the ratings: Factors that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expectations, and (2) an increase in credit enhancement available for the notes. Factors that could lead to a downgrade of the ratings include (1) performance of the underlying collateral that is worse than Moody's expectations, (2) a decrease in credit enhancement available for the notes, and (3) a deterioration in the credit quality of the transaction counterparties. JOHN WAYLAND: First Creditors' Meeting Set for Aug. 31 ------------------------------------------------------ A first meeting of the creditors in the proceedings of John Wayland Pty Ltd (trading as "Hunter & Newcastle Properties" and "Carbon Managers") will be held on Aug. 31, 2022, at 10:30 a.m. via teleconference. Kathleen Vouris and Richard Albarran of Hall Chadwick were appointed as administrators of the company on Aug. 19, 2022. MOBILIA GROUP: First Creditors' Meeting Set for Aug. 31 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Mobilia Group Australasia Pty Ltd will be held on Aug. 31, 2022, at 3:00 p.m. via teleconference only. Mohammad Najjar of Vanguard Insolvency Australia was appointed as administrator of the company on Aug. 19, 2022. MR YUM: Startup to Cut 17% of Workforce --------------------------------------- SmartCompany reports that digital menu and restaurant ordering startup Mr Yum will lay off nearly one in five workers, becoming the latest Australian firm to slash its headcount as market expectations dim. Taking to LinkedIn on Aug. 23, co-founder Kim Teo shared an email sent to staff detailing the "hardest decision we've made in Mr Yum's journey," SmartCompany relays. "After deeply exploring every option available, we have made the decision to reduce the Mr Yum team by approximately 17% to extend our runway while capital markets remain uncertain," the report quotes Ms. Teo as saying. Mr Yum counted a global team of 260 employees in May after acquiring MyGuestList, suggesting the layoffs will affect around 44 people at the company. The decision was borne of changing market sentiment in 2022, Ms. Teo said. Unlike the heady days of late 2021, in which Mr Yum raised its $89 million Series A round, rising inflation is now compressing economic growth projections and deterring big-name funds from massive investment pledges. "We completely accept and own that we increased our headcount too quickly," Ms. Teo said. "We made an assumption that the strong economic environment would continue deeper into 2022; instead, conditions deteriorated rapidly in May, back when we first communicated the situation with you, and capital markets have remained soft since." According to SmartCompany, the announcement comes just days after Mr Yum was selected for the Victorian Government's 30×30 program, designed to propel local startups to billion-dollar valuations by the end of the decade. SmartCompany relates that Ms. Teo said Mr Yum intended the headcount reduction to be the company's last as it seeks continual growth in the Australian and overseas markets. Impacted employees will be granted six weeks of severance on top of their notice periods, "accelerated" stock option vesting tied to Mr Yum's next corporate milestone, and extended access to Mr Yum's mental health support services. Workers laid off from the company will also face "career transition support" from Mr Yum, Ms. Teo said, SmartCompany relays. Such support is expected to include CV and interview advice, coaching, and introductions to employers who may be interested in taking on former Mr. Yum staff. SmartCompany relates that the company may soon follow in the footsteps of Australian companies like Linktree, which last week publicly shared a spreadsheet featuring the names and contact details of the 38 employees employees impacted by its own redundancy round. In doing so, Linktree emulated Swedish buy now, pay later player Klarna, whose CEO made headlines in June by sharing a spreadsheet of recently laid-off employee details. Companies interested in hiring Mr Yum staff impacted by the decision can also contact the company directly, adds SmartCompany. PEPPER PRIME 2022-2: S&P Assigns Prelim. B+ Rating on F Notes ------------------------------------------------------------- S&P Global Ratings assigned its preliminary ratings to seven classes of prime residential mortgage-backed securities (RMBS) to be issued by Permanent Custodians Ltd. as trustee of Pepper Prime 2022-2 Trust. Pepper Prime 2022-2 Trust is a securitization of prime residential mortgages originated by Pepper Homeloans Pty Ltd. (Pepper). The preliminary ratings reflect: -- S&P's view of the credit risk of the underlying collateral portfolio, including our view that the credit support is sufficient to withstand the stresses it applies. The credit support for the rated notes comprises note subordination and excess spread. The assessment of credit risk considers the underwriting standards and centralized approval process of the seller, Pepper. -- S&P's expectation that the various mechanisms to support liquidity within the transaction, including an amortizing liquidity facility equal to 1.5% of the invested amount of all notes, subject to a floor, principal draws, and an excess spread reserve that builds from excess spread, are sufficient under its stress assumptions to ensure timely payment of interest. -- The extraordinary expense reserve of A$150,000, funded by Pepper Money Ltd. on or before closing, available to meet extraordinary expenses. The reserve will be topped up via excess spread if drawn. -- The legal structure of the trust, which has been established as a special-purpose entity and meets S&P's criteria for insolvency remoteness. Preliminary Ratings Assigned Pepper Prime 2022-2 Trust Class A1, A$552.5 million: AAA (sf) Class A2, A$61.75 million: AAA (sf) Class B, A$10.4 million: AA (sf) Class C, A$9.1 million: A (sf) Class D, A$6.5 million: BBB (sf) Class E, A$3.9 million: BB+ (sf) Class F, A$3.25 million: B+ (sf) Class G, A$2.6 million: Not rated SOCIAL ENERGY: First Creditors' Meeting Set for Aug. 31 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Social Energy Australia Pty Ltd will be held on Aug. 31, 2022, at 3:30 p.m. via virtual meeting technology. Philip Campbell Wilson of Grant Thornton Australia was appointed as administrator of the company on Aug. 19, 2022. ========= C H I N A ========= BRIGHT SCHOLAR: Moody's Withdraws 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn the B2 corporate family rating of Bright Scholar Education Holdings Ltd. Prior to the withdrawal, the rating outlook on Bright Scholar was negative. RATINGS RATIONALE Moody's has decided to withdraw the rating for its own business reasons. COMPANY PROFILE Bright Scholar Education Holdings Ltd (Bright Scholar) was listed on the New York Stock Exchange in May 2017. It provides education services in China and overseas. KUN PENG: Incurs $690,000 Net Loss in Third Quarter --------------------------------------------------- Kun Peng International Ltd. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $689,999 on $642,596 of revenue for the three months ended June 30, 2022, compared to a net loss of $1.63 million on $452,027 of revenue for the three months ended June 30, 2021. For the nine months ended June 30, 2022, the Company reported a net loss of $966,818 on $7.33 million of revenue compared to a net loss of $2.27 million on $2.63 million of revenue for the same period in 2021. As of June 30, 2022, the Company had $1.75 million in total assets, $4.62 million in total liabilities, and a total deficit of $2.87 million. As of June 30, 2022 and Sept. 30, 2021, the Company had a cash and cash equivalents balance of $263,740 and $2,059,685, respectively. Kun Peng said, "We require additional cash of approximately $1.1 million within the next twelve months, primarily related to third party vendors payables. In an effort to support and maintain our financial position and operations, the Company focused on increasing its revenue through its online platform and trimming its overhead costs. As aforementioned, since the first quarter of 2022, our average monthly online sales have increased. We continue to exert efforts to increase our sales volume and reduce administrative costs. Simultaneously, our director continues to support our operation financially. We believe that such measures will improve our liquidity in the next twelve months. If we are not able to increase revenue or obtain any financing, we may be unable to continue as a going concern. "The Company continues to monitor its operations to help refine the Company's financial liquidity. The financial liquidity of the Company has declined to very unhealthy level in this quarter due to the decline in the balance of cash and cash equivalent. Options under consideration in the review process include, but not limited to, increase of sales on its online business, reduction of overhead costs, fund advance from the Company's stockholders and directors, or financing through issuance of shares. The Company continues to focus on increasing its revenue through its online platform and slimming its administrative costs. For example, we reduced the compensation and benefits of our executives, decreased office supplies expense and trimmed executive travel expenses. Additionally, our director will provide financing to meet our working capital requirements. "In order to continue as a going concern for the next 12 months, the Company continues to focus on increasing its revenue through the sale of health care products on its online platform, King Eagle Mall, streamlining its overhead costs or obtaining a financing from its stockholders or directors. However, the Company cannot provide any assurance that it will be able to increase revenue, that it will be able to successfully implement its business plan, or that financing that will be available to it on commercially acceptable terms, if at all." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001502557/000149315222023045/form10-q.htm About Kun Peng Kun Peng International Ltd. is engaged in the sale of health care products and services through its online platform. KPIL is a Nevada holding company with operations in the People's Republic of China conducted by various subsidiaries and through contractual agreements with a variable interest entity, King Eagle (Tianjin) Technology Co., Ltd. Kun Peng reported a net loss of $1.77 million for the year ended Sept. 30, 2021, compared to a net loss of $208,771 for the year ended Sept. 30, 2020. Malaysia-based J&S Associate, the Company's auditor since 2021, issued a "going concern" qualification in its report dated Jan. 13, 2022, citing that the Company has suffered recurring losses from operations and has incurred an accumulated deficit of $1,821,105 and a working capital deficit of $2,318,784 as at Sept. 30, 2021. These matters raise substantial doubt about the Company's ability to continue as a going concern. SEAZEN COMPANIES: S&P Lowers ICR to 'BB', Outlook Negative ---------------------------------------------------------- S&P Global Ratings, on Aug. 22, 2022, lowered its long-term issuer credit ratings on Seazen Group Ltd. (Seazen) and its subsidiary Seazen Holdings to 'BB' from 'BB+'. At the same time, S&P lowered its long-term issue rating on Seazen Holdings' outstanding senior unsecured notes to 'BB-' from 'BB'. The negative outlook on Seazen reflects the risk that the sales and liquidity sources of the China-based property holding company may continue to decline, which would result in worsening leverage and liquidity buffer. S&P said, "We lowered the ratings because Seazen's sales could significantly decline due to its market positioning and weak homebuyer sentiment. We expect the company's sales to decline by 33%-38% to Chinese renminbi (RMB) 145 billion-RMB156 billion in 2022." Seazen's contracted sales dropped by about 44% in the first seven months of 2022 over the same period in 2021. Despite month-on-month sales growth since May with a relaxation of COVID restrictions, poor homebuyer sentiment amid a mortgage boycott dampened property sales in July. Given that over 50%-60% of Seazen's saleable resources are located in lower-tier cities where demand is generally weaker, the company's sales recovery could be slow. Seazen's integrated property development model could face hiccups. The company has leveraged its Wuyue Plaza brand to acquire low-cost land, particularly in lower-tier cities. Historically, Seazen has relied on cash inflow from property sales to fund its mall construction. Given weaker demand in lower-tier cities, such an operating model appears increasingly difficult. S&P also believes the company could further deplete its already-thin landbank. In its estimation, Seazen's land reserves can support one and a half to two years of development. Seazen's liquidity buffer could narrow further with less cash generated from property sales while it pays off debt with internal resources. S&P estimates the group likely had about RMB8 billion accessible cash at the holding companies as of the end of the first quarter of 2022, down from about RMB12 billion as of end-2021. Seazen will have US$200 million and RMB2.8 billion of domestic and offshore financing maturing or puttable before the end of 2022. Although the company has managed to obtain new financing of US$100 million and RMB1 billion from capital markets in 2022, the amount is no comparison to over RMB10 billion equivalent of capital-market financing that it had repaid in the first eight months of 2022. S&P also believes further access to new capital-market financing could be subject to uncertainties. Seazen's portfolio of commercial properties may continue to provide funding support. The company has a track record of obtaining working capital loans from its Wuyue Plaza malls. For the first seven months of 2022, S&P estimates it obtained financing of nearly RMB6 billion from about 20 of its malls. It has about 60 unencumbered malls that could be further pledged for financing, although most could still be in the ramp-up stage. The negative outlook on Seazen reflects the risk that the company's sales and liquidity sources may decline more than S&P expects over the next 12 months. Along with margin compression, that may cause its debt-to-EBITDA ratio to weaken more than its base case. Seazen's liquidity buffer may also narrow further. However, S&P expects the company to have stable rental income and access to financing support from its commercial properties to mitigate the risk and to address debt maturities in the rest of 2022 and 2023. The ratings and outlook on Seazen Holdings will move in tandem with those on Seazen Group. S&P said, "We could lower the ratings on Seazen if its revenue slippage is materially worse than we expect, with sales declining more than our projection, or if its margin drops well below our forecast. A debt-to-EBITDA ratio staying above 5.0x over a sustained period could trigger a downgrade. "We could also downgrade the company if rental growth from its investment properties falls short of our expectations such that rental income, including contracted rental management fees, is insufficient to cover interest expense. In that case, our tolerance for weaker sales and lower margins would narrow. The company's ratio of debt to EBITDA staying higher than 4.5x over a sustained period would point to such a deterioration." A downgrade is also possible if Seazen's liquidity significantly weakens from the current level with continuous debt repayment using its own cash, without further new financings such as through pledges of existing malls over the next six to 12 months. S&P may revise the outlook back to stable if Seazen's sales and margins are better than it forecasts, such that the company maintains leverage below 5.0x, while growth in rental income is stable. At the same time, its liquidity remains at an adequate level, through satisfactory cash inflow from contracted sales and stable rental income, as well as new financing through pledges of existing malls. ESG credit indicators: E-3, S-2, G-3 ========= I N D I A ========= 10I COMMERCE: Files for Bankruptcy Protection --------------------------------------------- VCCircle.com reports that Bengaluru, India-based ShopX has decided to 'wind down its operations' and has filed an application for insolvency and bankruptcy under Section 10 of the Insolvency and Bankruptcy (IBC) code, 2016, the company said in a Ministry of Corporate (MCA) filing. VCCircle.com relates that the Nandan Nilekani-backed startup said that it defaulted on repayment of interest on loans due to the insufficiency of funds. The company said it took multiple loans from its investors including Nilekani and its Singapore-based backer Fung Investment, without sharing details about the figures. The e-commerce enablement platform added in the regulatory filing that it has considerably reduced its employees' strength to ensure that "there is no other recurring payment obligation of the company," VCCircle.com relays. Founded in 2014 by Amit Sharma and Apoorva Jois, ShopX is operated by 10i Commerce Services Pvt. Ltd. The company started as a platform that enabled local kirana stores and small retailers to manage transactions on a single platform. However, last year, it made changes to its operations to become an e-commerce enabler, pitting against a slew of startups in the space, the report says. The company also experimented with an app promising discount on the purchase of goods from nearby partner-retail stores, marking a foray into the consumer tech space. ShopX had last secured funds in April 2020. To date, the startup has raised more than $50 million in multiple funding rounds. In the filing, the company said "it was formed with the object to do business of operating an e-commerce platform for the sale of various products and services by third-party suppliers to wholesalers and retailers," VCCircle.com relas. "Since the business model of the Company has not succeeded, it has not been able to generate enough cash flow from operations or raise new capital and is therefore unable to meet its various payment obligations and has ceased to be a going concern," it added. ANANDALOK HOSPITAL: ICRA Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------------- ICRA has retained the long-term rating of Anandalok Hospital in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term– 5.10 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Term Loan 'Issuer Not Cooperating' Category Long-term– 7.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category Long Term- 0.40 [ICRA]D; ISSUER NOT COOPERATING; Non-Fund Rating continues to remain under Based-Others 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in 1989, Anandalok Hospital is a charitable society established for offering medical treatment at affordable rates to the economically weaker sections of the society. It runs six hospitals, four of them in Kolkata, and one each at Baduria and Raniganj, with a total capacity of 450 beds and a diagnostic centre in Kolkata. All the hospitals are multispecialty in nature. The society also undertakes other charitable activities. It distributes books to poor students, provides food,clothes and shelter to the poor people. Mr. Deo Kumar Saraf, a businessman, is the chairman of the society and has been associated with it since its formation. Mr. Arun Poddar, Ms. Jyotsna Poddar, Mr. R.P. Salarpuria, Mr. S.K. Roy, Mr. B.L. Jajodia, Mrs. Jayshree Mohta, Mr. Pawan Kumar Dhoot, Mr. Ashok Todi, and Mr. Lalit Beriwal, are some of the other members on the society's managing committee. BHALKESHWAR SUGARS: CRISIL Keeps D Ratings in Not Cooperating ------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Bhalkeshwar Sugars Limited (BSL) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Loan 18 CRISIL D (Issuer Not Cooperating) Term Loan 12.5 CRISIL D (Issuer Not Cooperating) Term Loan 43.5 CRISIL D (Issuer Not Cooperating) Term Loan 28 CRISIL D (Issuer Not Cooperating) Term Loan 38 CRISIL D (Issuer Not Cooperating) Working Capital 24 CRISIL D (Issuer Not Facility Cooperating) Working Capital 6 CRISIL D (Issuer Not Facility Cooperating) Working Capital 12 CRISIL D (Issuer Not Facility Cooperating) Working Capital 16 CRISIL D (Issuer Not Facility Cooperating) Working Capital 2 CRISIL D (Issuer Not Facility Cooperating) CRISIL Ratings has been consistently following up with BSL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of BSL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on BSL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of BSL continues to be 'CRISIL D Issuer Not Cooperating'. Incorporated in 2000, Karnataka-based BSL is promoted by Mr Prakash Khandre. It manufactures sugar and has a cane crushing capacity of about 2500 tonne per day (TPD) and a 14 megawatt co-generation power plant. It is undertaking a debt-funded capital expenditure plan to enhance the sugar crushing capacity up to 4000 TPD and setting up distillery units with total capacity of 60 kilo litres per day. Commercial operation of the distillery is expected to commence from January 2018. BIYANI SHIKSHAN: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Biyani Shikshan Samiti (BSS) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Overdraft Facility 11.12 CRISIL D (Issuer Not Cooperating) Overdraft Facility 1 CRISIL D (Issuer Not Cooperating) Overdraft Facility 0.2 CRISIL D (Issuer Not Cooperating) Overdraft Facility 0.2 CRISIL D (Issuer Not Cooperating) Proposed Long Term 37.48 CRISIL D (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with BSS for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of BSS, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on BSS is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of BSS continues to be 'CRISIL D Issuer Not Cooperating'. Set up in 1997 by Mr. Rajeev Biyani, Dr. Sanjay Biyani, and Dr. Manish Biyani, BSS was initially a coaching institute. It set up its first institute, Biyani Girls College, at Jaipur (Rajasthan) in 2003. It currently operates six institutes under the Biyani brand in two different campuses situated at Vidhyadhar Nagar and Kalwar in Jaipur. The institutes offer courses in the fields of commerce, nursing, education, technology, information technology, and management. BSS has more than 4300 students. BUSH TEA: CRISIL Keeps D Debt Ratings in Not Cooperating Category ----------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Bush Tea Company Private Limited (BTCPL) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7.5 CRISIL D (Issuer Not Cooperating) Cash Credit 20 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with BTCPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of BTCPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on BTCPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of BTCPL continue to be 'CRISIL D Issuer Not Cooperating'. Bush Tea was acquired by the current promoter, Mr Sanjay Prakash Bansal, in 2009. Prior to the acquisition, the company exported conventional tea to the US, the UK, and Gulf countries, but now mostly trades in conventional tea in the domestic market. It also trades in a small proportion of organic tea. Bush Tea procures equal amounts of tea from both auction houses and private players and blends it at its warehouse. The company sells tea mostly to players such as Tata Global Beverages Pvt Ltd, Jalpaiguri Tea Company and local players. CHEM STAR: CRISIL Keeps D Debt Rating in Not Cooperating Category ----------------------------------------------------------------- CRISIL Ratings said the rating on bank facilities of Chem Star International Private Limited (CIPL) continues to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with CIPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of CIPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on CIPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of CIPL continue to be 'CRISIL D Issuer Not Cooperating'. CIPL, set up in 2011, trades in shrimp. The Nellore (Andhra Pradesh)-based company has been promoted by Mr Shaik Mahaboob and his family members. DEEPA DEVELOPERS: ICRA Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- ICRA has retained the rating for the bank facilities of Deepa Developers in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D ; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term– 6.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category Long-term– 9.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Term Loan 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Promoted by Mr. Ramesh Kumar, Deepa Developers is a partnership firm with Mrs. Urmila Ramesh and Mrs. Deepa Sampath Bannan as his co-partners. Initially, Deepa Developers was engaged in development of residential and commercial complexes in Mangalore region; and has in the past, developed several properties under its group companies. However, the firm sold most of its properties and is presently engaged in managing Hotel Deepa Comforts (the Hotel) in Mangalore. During 2008-09, Deepa Developers constructed and developed a commercial complex - "Deepa Plaza" which houses Deepa Comforts. Apart from the Hotel, Deepa Plaza also houses several shops which have been completely sold post construction of the property. DHARMRAJ ALUMINIUM: CRISIL Keeps D Debt Rating in Not Cooperating ----------------------------------------------------------------- CRISIL Ratings said the rating on bank facilities of Dharmraj Aluminium Industries Private Limited (DAIPL) continues to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 20 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with DAIPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of DAIPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on DAIPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of DAIPL continue to be 'CRISIL D Issuer Not Cooperating'. DAIPL, incorporated in 2011, manufactures aluminium ingots. The company is currently promoted and managed by Mr. Vijay C Gujar and Mr. Bharat B Gujar. DAIPL has a manufacturing facility in Aurangabad (Maharashtra) with a capacity of 18,000 tonne per annum. FSD BUILDING: CRISIL Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of FSD Building Materials Private Limited (FSD) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Overdraft Facility 30 CRISIL D (Issuer Not Cooperating) Proposed Long Term 5 CRISIL D (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with FSD for obtaining information through letters and emails dated May 24, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of FSD, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on FSD is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of FSD continues to be 'CRISIL D Issuer Not Cooperating'. FSD, incorporated in 2010, is promoted by Mr Yahya Farouk Darvesh, Ms Hanifa Farouk Darvesh, and Mr Zakaria Farouk Darvesh based in Mumbai. The family has been engaged in the timber industry for over 100 years. The company trades in timber, medium-density fibreboard, and wood-based chemicals, and is managed by Ms Hanifa Farouk Darvesh and Mr Zakaria Farouk Darvesh. FUTURE RETAIL: Lenders Submit Loan Claims of US$2.64 Billion ------------------------------------------------------------ Reuters reports that lenders to India's Future Retail Ltd have submitted loan claims of about 210.58 billion Indian rupees (US$2.64 billion) under the ongoing insolvency process, according to a document released on the company's website on Aug. 23. A Mumbai court earlier this year ordered bankruptcy proceedings against Future Retail after it defaulted on loans with over 30 entities and its secured lenders rejected a $3.4 billion sale of its retail assets to market leader Reliance Industries According to Reuters, the latest claims were filed by 33 banks including Bank of New York Mellon, State Bank of India, HDFC Bank and Barclays Bank PLC. The loan claims by lenders could change depending on lenders' calculations as the bankruptcy case proceeds, the report notes. Future Group operates multi-branded retail outlets. The company's retail chains include department stores, outlet stores, sportswear, home improvement and consumer durables, supermarket, and convenience stores as well as food parks. As reported in the Troubled Company Reporter-Asia Pacific in late July 2022, an Indian court agreed to send Future Retail Ltd. into bankruptcy, allowing the creditors to find a new owner for the beleaguered retailer. According to Bloomberg News, the National Company Law Tribunal on July 20 gave its verdict on a petition by Bank of India to start the bankruptcy-resolution process for the cash-strapped retailer. It dismissed allegations from the local unit of Amazon.com Inc. that Future Retail's lenders were colluding with its founders to push the firm into insolvency. The court also appointed an administrator to take over the management at Future Retail. KRISHNAAM MOBILE: CRISIL Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Krishnaam Mobile and accessories Private Limited (KMAPL) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6.7 CRISIL D (Issuer Not Cooperating) Proposed Long Term 0.9 CRISIL D (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with KMAPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of KMAPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on KMAPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of KMAPL continue to be 'CRISIL D Issuer Not Cooperating'. Incorporated in 2006, KMAPL trades in mobile accessories. It is promoted by Mr. Amit Singhania and is based in Delhi. LOK ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------- ICRA has retained the long term and short term ratings of Lok Enterprises in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D/ [ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Short-term 10.00 [ICRA]D; ISSUER NOT COOPERATING; Non-fund based Continues to remain under the Others 'Issuer Not Cooperating' Category Long Term (1.00) [ICRA]D; ISSUER NOT COOPERATING; Interchangeable Rating Continues to remain under issuer not cooperating category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in 2002 as a partnership firm, LE is a trading house engaged in trading of various forms of pulses and beans into the domestic market. The firm has its registered office in Mumbai and a warehouse facility located in Vashi, Navi Mumbai. The firm undertakes import of pulses and beans and supplies it into domestic markets. The agricultural products comprise of raw pulses such as Masoor (split red lentils), Moong (split yellow lentil), Chana (chickpeas), Black eye bean, Toor Whole, Pinto bean etc. The traded goods are largely procured directly from international market. About 75% of the materials are sourced from Africa, Canada, USA, Argentina, Burma and Russia, while the remaining 25% are procured domestically. MA CHANDI: CRISIL Keeps D Ratings in Not Cooperating Category ------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Ma Chandi Durga Cement Limited (MCDCL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL D (Issuer Not Cooperating) Cash Credit 5.47 CRISIL D (Issuer Not Cooperating) Long Term Loan 11.26 CRISIL D (Issuer Not Cooperating) Long Term Loan 8.07 CRISIL D (Issuer Not Cooperating) Overdraft Facility 3.20 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with MCDCL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of MCDCL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on MCDCL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of MCDCL continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Incorporated in 2007, MCDCL is promoted by Mr. Kuldip Kedia. It manufactures cement and mild steel ingots in Durgapur, West Bengal. It also trades in iron and steel products such as thermos-mechanically treated bars, pig iron and slag, and does job work for firm, Star Cement. MADHAVA HYTECH: CRISIL Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Madhava Hytech Infrastructures India Private Limited (MHIPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 10 CRISIL D (Issuer Not Cooperating) Cash Credit 4 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with MHIPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of MHIPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on MHIPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of MHIPL continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. MHIPL undertakes civil construction work on contract basis for Railways, and State Road authorities. The company is promoted by Mr. Pradeep Kilaru and is based out of Hyderabad. MSR ENTERPRISES: CRISIL Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of MSR Enterprises (MSR) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 8 CRISIL D (Issuer Not Cooperating) Cash Credit 2.9 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with MSR for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of MSR, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on MSR is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of MSR continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Established in 1995, MSR Enterprises (MSR) is engaged in laying of distribution lines, erection of electrical substations and transformers, and refurbishment of old distribution lines. MSR majorly caters to all the four zonal power distribution companies of Andhra Pradesh and derives its entire from them. The firm is promoted by Mr. M Srinivasa Rao, a mechanical engineering graduate who manages the operations of the firm. NHS INDUSTRIES: CRISIL Keeps D Debt Ratings in Not Cooperating -------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of NHS Industries (NHS) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Overdraft Facility 2.5 CRISIL D (Issuer Not Cooperating) Term Loan 8.4 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with NHS for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of NHS, which restricts CRISIL Ratings' ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on NHS is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of NHS continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. NHS, based in Bengaluru, was established in November 2016 as a proprietorship firm by Mr Bhargava Reddy. The firm manufactures HDPE/PP (high-density polyethylene/polypropylene) woven sacks. OMEGA PREMISES: CRISIL Reaffirms B Rating on INR9.39cr Disc. Loan ----------------------------------------------------------------- CRISIL Ratings has reaffirmed its 'CRISIL B/Stable' rating on the long-term bank facilities of Omega Premises Pvt Ltd (OPPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Lease Rental Discounting Loan 4.87 CRISIL B/Stable (Reaffirmed) Lease Rental Discounting Loan 9.39 CRISIL B/Stable (Reaffirmed) Long Term Loan 4.91 CRISIL B/Stable (Reaffirmed) Long Term Loan 2.69 CRISIL B/Stable (Reaffirmed) Long Term Loan 9.69 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 18.45 CRISIL B/Stable (Reaffirmed) The rating continues to reflect modest debt service coverage ratio (DSCR), exposure to risks and cyclicality inherent in the domestic real estate industry, susceptibility to timely execution of projects and flow of customer advances and other risks pertaining to leasing of vacant area or saleability, and timely renewal of the lease contracts. These weaknesses are partially offset by the extensive experience of the promoter in the real estate industry, favorable location and diverse client base. Key rating drivers & detailed description Weaknesses: * Modest DSCR: Average DSCR was modest at 1.09 times for the tenure of the loans, with minimum DSCR at 0.5 time. The DSCR is further exposed to risk of escalation of rates for future renewal and lease rate of vacant property. Non-renewable of contracts could also affect the ratio. Any significant increase in interest rates may impact DSCR and will remain a rating sensitivity factor. * Susceptibility to timely execution of projects, and flow of customer advances: The company has one ongoing project that is halfway with its construction. With 57% of bookings done, the project remains exposed to risks related to completion and demand. Any delay in bookings or project execution will impact debt-repayment ability. * Exposure to risks and cyclicality inherent in the domestic real estate segment: The industry is highly fragmented with many regional players and is also exposed to economic cycles. CRISIL Ratings believe that the company will remain exposed to risk related to cyclicality in the Indian real estate business. * Susceptibility to risk pertaining to leasing of vacant area and timely renewal of lease contract: The company is exposed to risk pertaining to leasing or sale of vacant area, it currently has a low occupancy of around 50%. Timely leasing of the vacant space at sustainable rates and to clients with sound credit risk profiles will be crucial in maintaining adequate liquidity. Further, timely renewal of agreements with existing tenants at similar or higher rates will remain a key monitorable over the medium term. Strengths: * Extensive experience of the promoter in the real estate segment: The promoter has a strong track record of completing many residential and commercial projects over the past decade in Maharashtra. This would continue to benefit business risk profile over the medium term. * Favorable location and diverse clientele: The properties are located in the prime areas of Pune. Also, OPPL benefits from long tenured contracts with few clients such as Ramchandra Institute of Management and BDO India LLP. Moreover, clientele is diversified and includes Atlas Copco Tools and Assembly Systems Limited, HDFC Bank, Big Basket, and WeShine Tech. Locational advantage should continue to support the business over the medium term. Liquidity: Stretched The DSCR is average. Rentals are deposited in escrow account maintained with the bank and any surplus after debt servicing can be used by the company at its discretion. Existence of the escrow mechanism will enable the firm to service debt on time. Outlook: Stable OPPL should continue to benefit from the extensive experience of its promoter and long-term lease contracts with counterparties. Rating sensitivity factors Upward factors * Sustained improvement in cash DSCR to above 1.3 times, with higher cash flows or reduced debt * Faster-than-expected completion of projects and higher bookings Downward factors * Weakening of average cash DSCR below 1 time due to unanticipated downward revision in rental rates, increase in interest rates, or delay in sale of inventory * Unexpected delays in lease payments leading to cash flow mismatches, OPPL is a part of the Suhas Mantri group that was set up in the early 1990s. Promoted by Mr Suhas Mantri, the company undertakes commercial and residential real estate projects in Pune. It generates revenue through leasing out properties for commercial purposes while also through sale of residential and commercial real estate project. It currently has an ongoing commercial project, Mantri Mystica. PRASAD SUGAR: CRISIL Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of Prasad Sugar and Allied Agro Products Limited (PSAAPL) continue to be 'CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3.67 CRISIL D (Issuer Not Cooperating) Long Term Loan 27.50 CRISIL D (Issuer Not Cooperating) Pledge Loan 122.22 CRISIL D (Issuer Not Cooperating) Term Loan 26.61 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with PSAAPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of PSAAPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on PSAAPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of PSAAPL continue to be 'CRISIL D Issuer Not Cooperating'. PSAAAPL, incorporated in 2007, is owned and managed by Mr Shusilkumar Deshmukh and Mr Prasad Tanpure, and their family members. The company manufactures sugar at its plant in Rahuri Taluka in the Ahmednagar district of Maharashtra, with an installed capacity of 4,000 tonne crushed per day. It is currently setting up a molasses-based ethanol plant. PRAVEEN ELECTRICAL: CRISIL Keeps D Ratings in Not Cooperating ------------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of Praveen Electrical Works (PEW) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 11 CRISIL D (Issuer Not Cooperating) Overdraft Facility 6 CRISIL D (Issuer Not Cooperating) Proposed Long Term 3 CRISIL D (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with PEW for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of PEW, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on PEW is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of PEW continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. PEW was set up in 1994 as a sole proprietorship firm by Mr Prakash C Angadi. The firm undertakes turnkey projects for laying electrical cables and poles, and electrification projects. It has a facility in Karnataka. S. RASIKLAL: CRISIL Keeps D Debt Ratings in Not Cooperating ----------------------------------------------------------- CRISIL Ratings said the ratings on bank facilities of S. Rasiklal and Co. continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Adhoc Limit 1 CRISIL D (Issuer Not Cooperating) Foreign Exchange 0.60 CRISIL D (Issuer Not Forward Cooperating) Packing Credit 3.15 CRISIL D (Issuer Not Cooperating) Packing Credit 1.5 CRISIL D (Issuer Not Cooperating) Post Shipment 10.5 CRISIL D (Issuer Not Credit Cooperating) Post Shipment 5.25 CRISIL D (Issuer Not Credit Cooperating) Proposed Long Term 12.0 CRISIL D (Issuer Not Bank Loan Facility Cooperating) CRISIL Ratings has been consistently following up with S. Rasiklal for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of S. Rasiklal, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on S. Rasiklal is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of S. Rasiklal continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Set up in 1969 as a proprietorship concern by Mr. Rasiklal Shah, S. Rasiklal was reconstituted as a partnership firm in 1972. The firm is currently managed by Mr. Pravin Shah and his family. The firm manufactures and exports cut and polished diamonds. It is also engaged in the trading of polished diamonds. SAEL RG1: Fitch Withdraws BB(EXP) Rating on New USD Notes --------------------------------------------------------- Fitch Ratings has withdrawn the 'BB(EXP)' expected rating with a Stable Outlook assigned to SAEL RG1's proposed US dollar senior secured notes. The rating on the proposed senior secured notes was initially assigned on April 4, 2022. Fitch is withdrawing the expected rating as it is no longer expected to convert to a final rating in the near future. The company may resume the plan for an issuance once market conditions become conducive. KEY RATING DRIVERS Key rating drivers do not apply as the rating has been withdrawn. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Rating sensitivities do not apply as the rating has been withdrawn. RATING ACTIONS ENTITY/DEBT RATING PRIOR ----------- ------ -------- SAEL RG1 SAEL RG1/ LT WD Withdrawn BB(EXP) senior secured/ 1 LT SARIN'S: CRISIL Reaffirms B+ Rating on INR0.75cr Demand Loan ------------------------------------------------------------ CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of Sarin's. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 4 CRISIL A4 (Reaffirmed) Cash Credit 2.75 CRISIL B+/Stable (Reaffirmed) Working Capital Demand Loan 0.75 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect the modest scale of operations and large working capital requirement of the firm. These weaknesses are partially offset by the extensive experience of the proprietor in the civil construction industry. Key Rating Drivers & Detailed Description Weaknesses: * Working capital-intensive operations: Gross current assets were around 200 days as of March 31, 2022 (246 days as on March 31, 2021), on account of stretched receivables and current assets in the form of security deposits for contracts to be executed. Hence, working capital requirement will remain large over the medium term. * Modest scale of operations and limited geographical reach: Revenue remained subdued at INR9.68 crore in fiscal 2022 (Rs 9.32 crore in fiscal 2021) because operations are restricted to the Northeast (mainly Manipur and Arunachal Pradesh). Also, income tends to fluctuate due to the geo-political conditions in the area. Strength: * Extensive experience of the proprietor: The two-decade-long presence of the proprietor in the civil construction business and his active involvement in daily operations have enabled the firm to secure orders from Assam Rifles and Military Engineer Services Liquidity: Stretched Expected annual cash accrual of INR0.42 crore will tightly match yearly debt obligation of INR0.35 crore, over the medium term. Bank limit utilization averaged around 30% over the 12 months through May 2022. Outlook Stable Sarin's will continue to benefit from the extensive experience of its proprietor in the civil construction businesss. Rating Sensitivity factors Upward factors: * Sustained growth in topline by over 20%, leading to cash accrual above INR1.00 crore * Better working capital management * Improvement in financial risk profile Downward factors: * Decline in net cash accrual below INR0.4 crore over the medium term * Further stretch in working capital cycle * Weakening of financial risk profile Sarin's was formed as a proprietary concern of Mr Deepak Sarin in 1984. The Shillong-based firm constructs commercial and residential buildings for the Assam Rifles and Military Engineer Services in the Northeast. SETCO AUTO: ICRA Hikes Rating on INR215cr NCD from D ---------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Setco Auto Systems Private Limited (SASPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Non-convertible Debenture 215.00 [ICRA]B-(Stable); upgraded from [ICRA]D Non-convertible Debenture 350.00 [ICRA]B-(Stable); assigned Rationale The rating upgrade for SASPL considers its consistent track record of timely servicing of debt obligations, post restructuring and business transfer in September 2021. At SAL (parent company) standalone level, as a part of restructuring, all external debt has been repaid and the company only has unsecured loans from SASPL. The upgrade also follows the change in methodology from a consolidated to standalone view, going forward, as the entry of new investors lead to the dilution in 100% ownership by SAL earlier. Also, with restriction in upstreaming of funds as a part of loan agreement with the new investors, the fungibility of funds is constrained, which was available earlier, thereby moving to a standalone view, going forward. Previously, for arriving at the ratings of SASPL, ICRA had taken a consolidated view of Setco Automotive Limited (SAL) and its subsidiaries, given the close business, financial and managerial linkages among the entities. However, in FY2022, SAL had undergone a financial restructuring, which was utilised to repay dues to all existing lenders including working capital lenders. A portion of the funds have also been utilised to meet overdue statutory liabilities and stretched creditors. Simultaneously, with a view to unlock the value, SAL had executed a business transfer agreement on August 31, 2021, whereby SAL had transferred its clutch manufacturing business to SASPL, its step-down subsidiary. Consequently, SASPL raised debt funding through issuance of listed non-convertible debentures from IRF, which was primarily used to repay the stretched creditors, support Lava Cast Private Limited (LCPL, 10.31% held by SASPL), streamline the business, and re-energise the company through liquidity support. Simultaneously, SASPL also raised equity funding against issuance of equity shares and certain convertible instruments which resulted in subscription of 35% shareholding of SASPL by the India Resurgence Fund schemes, managed by India Resurgence Asset Management Business Private Limited. ICRA notes that there is a constraining factor to upstream the funds to the parent entity (SAL), unless approved by the new investors. Hence, ICRA now takes a standalone approach for SASPL. ICRA also notes that the group profile continues to be weak given continuing delays in debt servicing in LCPL, due to underutilisation of capacity. SASPL has provided support to LCPL for maintenance capex and business stabilisation through funds from Non-convertible Debentures (NCD), equity infusion in FY2022 and partly in the current fiscal too. However, at present, no further support will be extended to LCPL or upstreaming of funds to SAL or any other Group entity, and will be a key monitorable, going forward. The rating also factors in SASPL's weak financial profile on account of high losses and modest debt coverage indicators. The rating is also constrained by the company's significant debt, coupled with accumulative interest with redemption falling in FY2026. The company's ability to timely redeem the bonds through a mix of refinancing, equity infusion or generation of internal accruals, will remain a key monitorable for its credit profile. The rating, however, notes the extensive experience of the promoters, established operational track record and strong relationships with original equipment manufacturers (OEM) in the M&HCV clutch manufacturing business. The rating also considers the improvement in SASPL's operating profile, post infusion of funds through NCDs, which lead to streamlining of the business. The Stable outlook reflects ICRA's expectation that SASPL will continue to benefit from its established operational track record, extensive experience of the promoters and its ability to scale-up the business in a profitable manner. Key rating drivers and their description Credit strengths * Extensive experience of promoters' and established operational track record of Group in auto component industry: SAL had executed a business transfer agreement on August 31, 2021, whereby SAL had transferred its clutch manufacturing business to SASPL, its step-down subsidiary. Before the restructuring, SAL was managed by Mr. Harish Sheth. At present, SASPL is managed by Mr. Harish Sheth, who has an experience of over 35 years in the auto component industry. The company manufactures clutches primarily for MHCVs and the Group has an established operational track record of nearly 35 years. The company's revenues are distributed across three key segments, original equipment manufacturers (OEM), original equipment suppliers (OES) and independent aftermarket (IAM). It forayed into manufacturing clutches for the farm tractor segment in FY2021. * Strong relationships with OEMs along with repeat business from major OEMs: The company has developed an established customer base with repeat orders. It has an established brand presence in the automotive market with reputed M&HCV OEMs in India. Improvement in operating profile witnessed post infusion of funds through NCDs, leading to streamlining of business – SAL underwent a financial restructuring to unlock value of the company's clutch manufacturing business and streamline the business. In September 2021, the company had issued unlisted non-convertible debentures worth INR350 crore to the India Resurgence Fund (IRF) schemes, managed by India Resurgence Asset Management Business Private Limited. The funds have been utilised to repay dues to all existing lenders including working capital lenders. A portion of the funds have also been utilised to meet overdue statutory liabilities and pressing creditors. Simultaneously, with a view to unlock the value, the company had executed a business transfer agreement on August 31, 2021, whereby SAL has transferred its clutch manufacturing business to SASPL. Consequently, SASPL raised debt funding through issuance of listed non-convertible debentures for INR215 crore from IRF. Simultaneously, SASPL also raised equity funding of INR50.00 crore against issuance of equity shares and certain convertible instruments, which resulted in subscription of 35% shareholding of SASPL by the India Resurgence Fund schemes. The funds were utilised to energise the business. This resulted in debottlenecking the business to an extent. The company reported an operating income of INR262 crore in FY2022 (September 7, 2021 to March 31, 2022), with operating margins of 7.9% and has been consistent in repaying all debt obligations on time post the restructure. Credit challenges * Weak financial profile characterised by net losses and modest debt coverage indicators: SASPL's financial profile remained weak on the back of net losses as on March 31, 2022. It reported losses of INR173.0 crore owing to lower top-line, high interest expenses and significant exceptional losses. The company reported revenues of INR262 crore in FY2022 (September 7, 2021 to March 31, 2022) and INR140.4 crore in Q1 FY2023, with operating margins of 7.9% and 13.4%, respectively. The company's debt coverage indicators remained weak in FY2022 on account of high debt levels. * Significant debt, coupled with accumulative interest with redemption falling in FY2026: SASPL has a significant debt of INR565.0 crore in FY2026, along with the accrued interest till FY2026. The company is required to mandatorily pay 5% coupon interest per annum on NCD with an option to repay the accrued interests from time to time, which however, will depend on the company's ability to generate healthy cash flows through operations. The ability to successfully manage timely repayment of NCD and accrued interest generated till FY2026, through either refinancing or in-house generation of cash flows or any equity support, remains critical for the credit profile and will remain a key monitorable. * Stressed financial profile of associate entity Lava Cast Pvt. Ltd, which continues to be under default: LCPL, an associate of SASPL with a 10.31% shareholding, started commercial production from April 2016, wherein it has an installed casting capacity of 30,000 MTPA. LCPL has been reporting losses for the past four years owing to internal challenges such as higher rejections and lower yields. The downturn in the OEM production in FY2020 and FY2021 further impacted the company's utilisation levels. LCPL could not service the debt obligation in FY2020 due to high losses and internal challenges. The company underwent debt restructuring, which was implemented in FY2021, providing a much-needed liquidity buffer to LCPL through an elongated repayment period, along with lower interest costs. Due to the continuation of internal challenges, the company was unable to service the debt obligation in FY2022. SASPL had provided support to LCPL during FY2022 from the funds received from NCD and equity for maintenance capex and for stabilisation of the business. However, no further support to LCPL, SAL or any other Group entity from SASPL, is expected, going forward, and will remain a rating monitorable. * High exposure to cyclicality in auto Industry: SASPL primarily caters to the automobile industry and manufactures clutches used in MHCVs. Thus, it remains exposed to the cyclicality in the auto industry, evident from the volatility in the top-line over the past fiscals. However, supplies to OEM's constitutes approximately 40% of topline, balance 60% is through replacement market. Liquidity position: Stretched The company's liquidity profile remains stretched, with minimal liquidity buffer in the form of undrawn working capital, reflected in the more than 97% average monthly utilisation of the fund-based working capital limits during the nine-month period that ended on June 30, 2022. Moreover, the company has significant debt with accumulated interest in FY2026. The company's ability to successfully manage timely redemption through either refinancing or in-house generation of cash flows or any equity support, remains a monitorable. Rating sensitivities Positive factors – ICRA could upgrade SASPL's rating if there is a sustained improvement in its sales turnover and profitability along with liquidity, which strengthens the entity's overall financial profile. Negative factors – A sharp decline in revenues and profitability, on a sustained basis, or any stretch in the working capital which weakens SASPL's liquidity and financial risk profiles, may trigger a rating downgrade. Any support extended to its parent entity or any other entity in the Group which impacts the liquidity profile of SASPL will also be a negative rating trigger Established in 1982 in collaboration with Gujarat Industrial Development Corporation (GIDC), Gujarat Setco Automotive Limited (GSAL) was a manufacturer of clutches for original equipment manufacturers (OEMs). Around 2000, GIDC stepped out of GSAL, and it was renamed as Setco Automotive Limited (SAL). In September 2021, SAL's clutch business was transferred to its wholly-owned subsidiary, Setco Auto Systems Private Limited on a slump sale basis. SASPL is promoted by the Sheth family and manufactures clutches primarily for MHCVs. The company sells clutches under its own brand name – 'LIPE'. SASPL is managed by Mr. Harish Sheth, who has an experience of over 35 years in the auto component business. The company has its own manufacturing unit in Gujarat and another assembly unit in Uttarakhand. In addition to OEMs, the company caters to the original equipment suppliers (OES) and independent aftermarket (IAM). In FY2021, the company forayed into manufacturing clutches for the farm segment (tractors). SR CYLINDERS: CRISIL Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ CRISIL Ratings said the ratings on bank facilities of SR Cylinders Private Limited (SRCPL) continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.5 CRISIL D (Issuer Not Cooperating) Cash Credit 3 CRISIL D (Issuer Not Cooperating) Letter of Credit 1 CRISIL D (Issuer Not Cooperating) Term Loan 5.5 CRISIL D (Issuer Not Cooperating) CRISIL Ratings has been consistently following up with SRCPL for obtaining information through letters and emails dated May 10, 2022 and July 11, 2022 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.' Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of SRCPL, which restricts CRISIL Ratings' ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SRCPL is consistent with 'Assessing Information Adequacy Risk'. Based on the last available information, the ratings on bank facilities of SRCPL continue to be 'CRISIL D/CRISIL D Issuer Not Cooperating'. Incorporated in 2015 in Hyderabad and promoted by Mr. Shiva Shankara Reddy, SRCPL manufactures domestic liquefied petroleum gas (LPG) cylinders, in sizes ranging from 2 47.50 kilograms. It also offers services like such as hot/cold repair of cylinders. TRISTAR INTERCONTINENTAL: ICRA Keeps D Ratings in Not Cooperating ----------------------------------------------------------------- ICRA has retained the long-term and short-term ratings of Tristar Intercontinental Pvt Ltd in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]D/ [ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term– 4.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category Short-term 12.00 [ICRA]D; ISSUER NOT COOPERATING; Non-fund based Continues to remain under the Others 'Issuer Not Cooperating' Category Long-term/ 9.00 [ICRA]D/[ICRA]D; ISSUER NOT Short Term COOPERATING; Rating Continues to Unallocated remain under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in 1985, and promoted by Mr. Pawan Aggarwal, Tristar Intercontinental Private Limited (TIPL), erstwhile known as Tristar Iron and Steel Company Private Limited, was mainly involved in the business of dealing in iron and steel products. However, the commercial operations of the company commenced from 1995, which included trading in woollen products and at present TIPL is mainly involved in supplying scoured wool and yarn in the domestic and international markets. The company has its head office in Jogeshwari, Mumbai. ========= J A P A N ========= MITSUBISHI HEAVY: Supreme Court Yet to Rule on Liquidating Assets ----------------------------------------------------------------- The Korea Times reports that the Supreme Court of Korea delayed making a decision on liquidating Mitsubishi Heavy Industries' assets to compensate victims who were forced to labor for the company during Japan's 1910-1945 colonial occupation of Korea. According to the report, the decision was widely expected to mark a watershed moment in Seoul-Tokyo relations, as Japan sees the liquidation as a "red line" and has warned Korea that it would regret crossing it. As the top court deliberates on the thorny issue, it appears that the Yoon Suk-yeol government was also afforded time to explore ideas that will improve bilateral relations without further damage to the victims, the report says. The Korea Times relates that the top court is deliberating an appeal by Mitsubishi Heavy Industries against a local court's 2021 order to liquidate the company's assets to compensate the victims. However, the Supreme Court did not announce whether it will dismiss the appeal as of 5:00 p.m. Aug. 19, meaning it will continue looking into the case. The report notes that the legal battle arose after two separate 2018 Supreme Court rulings ordered Japanese companies - Nippon Steel & Sumitomo Metal (renamed Nippon Steel) and Mitsubishi Heavy Industries - to compensate forced labor victims. In 2019, Japan imposed tighter export controls on key industrial items heading to Seoul in protest against the rulings, which soured bilateral relations. The Japanese companies have refused to make compensatory payments, the report says. On Sept. 27, last year, Daejeon District Court decided to liquidate Mitsubishi Heavy's assets ― two patents and two trademark rights ― and the company appealed the ruling. After its first appeal was dismissed, the company filed another appeal on April 19 this year. According to the Act on Special Cases Concerning Procedure for Trial by the Supreme Court, the top court can dismiss an appeal without stating the reason within four months of its filing, if the appeal does not have acceptable grounds. Since Mitsubishi filed the appeal on April 19, the court could have dismissed the case - and thus liquidate relevant assets - up until Aug. 19 without stating any detailed reason, according to the report. Against this backdrop, Korea's foreign ministry has organized a consultative body involving government officials, victims, their legal representatives and experts to explore ideas to solve the thorny issue before the Supreme Court justices come to a decision. However, their talks appeared to be derailing, as the victims remained unhappy with the government's idea of Seoul paying the compensation and recouping the costs via alternative methods. The Korea Times says the victims left the consultative body after discovering that the foreign ministry on July 26 submitted its letter of opinion to the Supreme Court without informing the victims. A number of civic groups supporting the victims claimed that the government in the letter asked the court to postpone making a final decision given potential diplomatic friction with Japan, and that this is "largely the same as Mitsubishi's stance." Although the Supreme Court did not dismiss Mitsubishi's appeal on Aug. 19, experts said chances are slim that the court will side with the Japanese company in the future, because the court already handed down a ruling in 2018 ordering the company to compensate the victims, the report states. Rep. Lee Sang-min of the main opposition Democratic Party of Korea (DPK) said during National Assembly Foreign Affairs and Unification Committee meeting on Aug. 19 that "the appeal will be dismissed without further review," adding that the government's idea of a subrogated compensation would be helpful for the situation, The Korea Times relays. During the meeting, Foreign Minister Park Jin said it is "difficult to anticipate the Supreme Court's decision," but the ministry will continue listening to stakeholders and making diplomatic efforts to reach a desirable resolution of the issue. About Mitsubishi Heavy Based in Japan, Mitsubishi Heavy Industries, Ltd. -- http://www.mhi.co.jp/indexe.html-- was founded by Yataro Iwasaki in 1884 as a shipbuilding firm called Nagasaki Shipyard & Machinery Works, which was later named Mitsubishi Shipbuilding Co. Ltd., and then again launched as Mitsubishi Heavy Industries, Ltd. in 1934 as a private firm that manufactured ships, heavy machinery, airplanes and railroad cars. In 1950, Mitsubishi Heavy was divided into three separate entities on a law aimed toward dissolving Nagasaki Shipyard & Machinery Works and thus dismantling the overconcentration of economic power. It was later consolidated in 1964 and reborn as Mitsubishi Heavy Industries, Ltd. MITSUBISHI MOTORS: S&P Affirms 'BB' LT ICR & Alters Outlook to Pos. ------------------------------------------------------------------- S&P Global Ratings has revised to positive from stable the outlook on its long-term issuer credit rating on Mitsubishi Motors Corp., a Japan-based automaker. S&P affirmed the 'BB' long-term issuer rating. S&P said, "We revised the outlook based on our view that: 1) its EBITDA margin is increasingly likely to remain stable at 6% or higher for the next one to two years thanks to effects of its strategic efforts, and 2) the company will likely maintain a sound financial base with a net cash position in the next one to two years, by maintaining positive free operating cash flow (FOCF) in the automotive business. "We believe its EBITDA margin is increasingly likely to remain above 6% for the next year or two. In fiscal 2020 (ended March 31, 2021), the company's operating profit before depreciation and amortization (EBITDA) fell into the negative amid the pandemic. However, its EBITDA margin recovered to 6.3% in fiscal 2021 because the company reduced fixed costs and sales incentives as part of its business restructuring efforts. Despite higher raw material costs, we expect profitability will be underpinned, in fiscal 2022, by reduced fixed costs. Also, we think a recovery in new vehicle sales in its core Southeast Asian market and Japanese yen depreciation will also support the profitability. We expect its new car sales in Southeast Asia to increase by 15%-20% year-on-year in fiscal 2022 as demand recovers from the pandemic. "We assume the company will maintain a net cash position in the automotive business by maintaining positive FOCF over the next one to two years. In fiscal 2021, the company secured ¥13 billion in FOCF through efficient working capital management in its automotive business, despite supply chain disruptions. We estimate it will generate annual FOCF of ¥10 billion-¥50 billion over the next one to two years. During that period, we expect annual operating cash flow to be at ¥100 billion-¥150 billion, and capital expenditures to be managed at ¥ 90 billion-¥100 billion annually. Its research and development (R&D) expenses will likely be managed at around 5% of revenue. This is because we believe the company will shift toward electrification efficiently through its alliance with Nissan Motors Co. Ltd. and by taking advantage of its established plug-in hybrid technologies. "The positive outlook reflects our view that the company's EBITDA margin is increasingly likely to remain at 6% or higher over the next one to two years, despite challenges in the business environment such as increases in raw materials prices and the semiconductor chip shortage. We believe the profitability will be underpinned by reduced fixed costs in its business restructuring. In addition, a new car sales recovery in Southeast Asia and Japanese yen depreciation will also likely support its profitability. Moreover, we expect the company to maintain conservative financial discipline. "We may consider an upgrade in the next one to two years if the following two factors look likely to occur. First, the company's EBITDA margin will hover above 6% consistently without the influence of a weaker Japanese yen. Second, we have stronger expectations that it will maintain positive free cash flow after shareholder returns." S&P may consider revising down the outlook to stable if either of the following scenarios occur. The EBITDA margin deteriorates to below 6% and is unlikely to recover quickly. This could happen if there is a deterioration in the business environment, triggered by issues such as further raw material price increases or significant reduction in production because of the semiconductor chip shortage. S&P sees a prospect of negative free cash flow in its automotive business persisting due to large investment or increase in fixed costs, and there is a growing likelihood that financial soundness weakens. ESG credit indicators: E-3, S-2, G-3 Environmental factors are a moderately negative consideration in our credit rating analysis of Mitsubishi Motors Corp. This is due to the increasingly stringent greenhouse gas regulations the industry faces. S&P said, "We believe Mitsubishi Motors' R&D expenses-to-sales ratio will likely remain at around 5% over the next one to two years, given its aim to increase electric vehicle sales to 50% by 2030 from 10% today. In this category, it mainly aims to increase sales of PHEVs. The company's established PHEV technology and its technology use and development alliance with Nissan and Renault mean it likely can achieve its target, in our view." A partial mitigant is Mitsubishi Motors' exposure to ASEAN countries (historically accounting for over 50% of its operating profit) with relatively moderate environmental regulations. Meanwhile, governance factors are a moderately negative consideration. S&P said, "We have observed steady improvement in governance since a data manipulation case in 2016. However, we will continue to monitor the company's efforts to enhance risk management and its efforts to stabilize profitability." ===================== N E W Z E A L A N D ===================== ARMSTRONG DOWNES: Playground Won't Open in Time for Summer ---------------------------------------------------------- NZ Herald reports that Wellington's beloved Frank Kitts Park playground will no longer open in time for summer, after a large commercial building business went into liquidation earlier this year. Shareholders in Armstrong Downes Commercial 2012 put their company in the hands of David Ruscoe and Russell Moore of Grant Thornton, it was revealed in May. NZ Herald says the company was building Te Aro's $50 million 152-unit Taranaki St project, The Paddington, as well as working on a $6 million redevelopment of the waterfront playground. The playground was getting a re-vamp after its iconic slide was removed last year following what the city council referred to as a number of "unfortunate" incidents. One of those was a 5-year-old who broke her leg while playing on the tower slide. She broke her right tibia, requiring a full leg cast from her hip to her toes. Now, Wellington City Council documents reveal construction is scheduled to start up again either late this month or in early September. This means the project will not be completed until March or April next year. It was originally meant to open in October. The council estimated it would cost an additional $1.5 million to complete the project as a result of the liquidation. Downer is set to take over the contract. According to NZ Herald, the council's Infrastructure Committee chairman, Sean Rush, said it was disappointing the playground would not be opened as early as planned. "The liquidation has had that effect, the team has done really well though and we expect to sign up with Downer this month, keep on the subcontractors as best we can, and hopefully get it back on track." AUBREY EDWARD: Creditors' Proofs of Debt Due on Sept. 15 -------------------------------------------------------- Creditors of Aubrey Edward Construction Limited, Aubrey Edward Group Limited, AEG Browns Bay Limited, and Hurstmere Road Centre Limited, are required to file their proofs of debt by Sept. 15, 2022, to be included in the company's dividend distribution. Aubrey Edward Construction Limited, Aubrey Edward Group Limited, AEG Browns Bay Limited commenced wind-up proceedings on Aug. 16, 2022. Hurstmere Road Centre Limited commenced wind-up proceedings on Aug. 17, 2022. The company's liquidator is: Benjamin Francis Gerry Rea Partners PO Box 3015 Auckland CORRECTIVE BUILDING: Creditors' Proofs of Debt Due on Sept. 20 -------------------------------------------------------------- Creditors of Corrective Building Services Limited are required to file their proofs of debt by Sept. 20, 2022, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Aug. 16, 2022. The company's liquidator is: Thomas Lee Rodewald Rodewald Consulting Limited Level 1, The Hub 525 Cameron Road PO Box 15543 Tauranga 3144 JDS BUILDING: Court to Hear Wind-Up Petition on Aug. 25 ------------------------------------------------------- A petition to wind up the operations of JDS Building Limited will be heard before the High Court at Dunedin on Aug. 25, 2022, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition against the company on June 16, 2022. The Petitioner's solicitor is: David Tasker Inland Revenue, Legal Services PO Box 1782 Christchurch 8140 LOMAS TRUSTEES: Creditors' Proofs of Debt Due on Sept. 15 --------------------------------------------------------- Creditors of Lomas Trustees Limited are required to file their proofs of debt by Sept. 15, 2022, to be included in the company's dividend distribution. Lomas Trustees Limited commenced wind-up proceedings on Aug. 12, 2022. The company's liquidator is: Benjamin Francis Gerry Rea Partners PO Box 3015 Auckland NICOLL GROUP: Court to Hear Wind-Up Petition on Sept. 8 ------------------------------------------------------- A petition to wind up the operations of Nicoll Group Limited will be heard before the High Court at Napier on Sept. 8, 2022, at 2:15 p.m. Plan B Hydraulics Limited filed the petition against the company on June 17, 2022. The Petitioner's solicitor is: Jeffrey Gray Ussher Level 19 191 Queen Street Auckland QUEST INSURANCE: A.M. Best Affirms B(Fair) Fin. Strength Rating --------------------------------------------------------------- AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of "bb+" (Fair) of Quest Insurance Group Limited (Quest) (New Zealand). The outlook of these Credit Ratings (ratings) is stable. The ratings reflect Quest's balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). In addition, the ratings factor in a neutral impact from the company's ultimate majority ownership by Federal Pacific Group Limited. Quest's balance sheet strength assessment is underpinned by its risk-adjusted capitalization, which was at the strongest level as at fiscal year 2022, as measured by Best's Capital Adequacy Ratio (BCAR). The company's underwriting risk has increased significantly in recent years due to strong portfolio growth. However, this was partially offset by its improved asset quality following the sale of an underlying asset in an illiquid private equity investment in fiscal year 2021. The current asset allocation of cash, term deposits and affiliated loans is expected to remain largely unchanged over the medium term. Offsetting balance sheet strength factors include the company's small absolute capital base, which increases the sensitivity of risk-adjusted capitalization to stress scenarios and changes in future performance, business growth and dividend payouts. AM Best assesses Quest's operating performance as adequate and notes its moderate level of volatility. The company has a five-year average return-on-equity ratio of 18.8% (fiscal years 2018 to 2022) and the overall earnings during this period reflect a combination of robust underwriting performance and positive investment returns. The company's underwriting performance has improved over the past two years largely due to a lower expense ratio despite a deterioration in its loss ratio. The improved expense ratio was mainly driven by economies of scale, as well as a lower commission rate due to changes in product mix and the earnings pattern of premium for long duration products as those policies mature. However, recent rapid business growth in the company's less profitable comprehensive vehicle insurance (CVI) has resulted in an increased loss ratio; this is expected to continue to drive potential volatility in its operating performance over the medium term. Quest's business profile assessment of limited reflects its small market presence and relatively concentrated niche product offering, largely as a provider of CVI and mechanical breakdown insurance (MBI) in New Zealand. The company's scale of operation has increased significantly in recent years, driven by both the growth in Quest's direct channels and a strategic partnership with Janssen Insurance Limited (Janssen), a third-party distributor of motor-related insurance. This has diversified Quest's distribution channels outside of affiliated business written in conjunction with its intermediate parent group, Geneva Finance Limited. However, there is a level of concentration risk associated with the company's distribution agreements with Janssen. Prospectively, AM Best expects Quest's business growth over the medium term to be driven largely by increased volumes written through the partnership with Janssen, as well as from direct distribution of MBI and CVI business. AM Best assesses Quest's ERM as appropriate given the current size and complexity of the company's operations. Following recent business expansion, the company is exposed to an elevated level of underwriting and execution risk. However, this risk has been mitigated partially to date through adequate monitoring of underwriting performance, and a conservative approach to pricing and reserving supported by a third-party actuary. AM Best considers Quest's risk management capabilities as appropriate for its key risks, and expects continual development as the company increases its scope of operations over the near term. WHITE SWAN: Creditors' Proofs of Debt Due on Sept. 15 ----------------------------------------------------- Creditors of White Swan Trustee 2017 Limited are required to file their proofs of debt by Sept. 15, 2022, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Aug. 15, 2022. The company's liquidator is David Edward Thomas. =============== P A K I S T A N =============== PAKISTAN: CB Rates at 15%, To Closely Watch Inflation ----------------------------------------------------- Reuters reportst that Pakistan's central bank on Aug. 23 held its main policy rate at 15%, the bank said in a statement, adding it would closely watch inflation data and global commodity prices. "Looking ahead, the MPC (monetary policy committee) intends to remain data-dependent, paying close attention to month-on-month inflation . . . as well as global commodity prices and interest rate decisions by major central banks," the State Bank said in a statement. Reuters relates that the decision, which was largely in line with analysts' expectations, came after the bank hiked rates by 125 basis points at its previous policy meeting in July as the country experienced surging inflation. Pakistan is in economic turmoil with fast-depleting foreign reserves, an historic depreciation of the rupee against the U.S. dollar and soaring inflation, according to Reuters. Reuters says the decision comes ahead of a crucial meeting by the International Monetary Fund (IMF) in Washington next week, at which the bank said it was expected to approve a $1.2 billion tranche of lending. Pakistan's annual consumer price inflation reached 24.9% in July, the highest in 14 years, according to its statistics bureau. Still, the bank said there were signs that inflationary demand pressures were easing, which justified holding rates steady, Reuters relates. "With recent inflation developments in line with expectations, domestic demand beginning to moderate and the external position showing some improvement, the MPC felt that it was prudent to take a pause at this stage," the bank said. It projected headline inflation would peak in the first quarter of the fiscal year - which began in July - before gradually declining through the rest of the year. The bank also welcomed expected fiscal consolidation to around 3% of gross domestic product, Reuters relays. "It envisages a strong fiscal consolidation . . . which is appropriate to cool the economy and ensure a reduction in inflation and the current account deficit," it said. To help achieve this result and reduce the country's import bill, it expected government measures to promote markets closing early, reduce electricity use, and to encourage remote work from home and car pooling, the report notes. Reuters says fiscal consolidation has been a key demand of the IMF. Pakistan's last loan disbursement from the fund was in February and the next tranche was to follow a review in March, but the government of ousted prime minister Imran Khan introduced costly fuel price caps which threw fiscal targets and the programme off track. Pakistan is a country located in South Asia. It has a coastline along the Arabia Sea and the Gulf of Oman and is bordered by Afghanistan, China, India, and Iran. Pakistan's capital is Islamabad. As reported in the Troubled Company Reporter-Asia Pacific, S&P Global Ratings on July 28, 2022, revised the outlook on Pakistan's long-term ratings to negative from stable. S&P also affirmed its 'B-' long-term and 'B' short-term sovereign credit ratings on Pakistan, as well as its 'B-' long-term issue rating on Pakistan's senior unsecured notes and sukuk trust certificates. The negative outlook reflects growing risks to Pakistan's external liquidity position over the next 12 months amid an increasingly difficult economic landscape. ============= V I E T N A M ============= DAT XANH: Fitch Affirms 'B' IDR & Then Withdraws Rating ------------------------------------------------------- Fitch Ratings has affirmed Vietnam-based Dat Xanh Group Joint Stock Company's Long-Term Issuer Default Rating (IDR) at 'B' and has simultaneously withdrawn the rating. At the time of withdrawal, the Outlook was Stable. The agency has also withdrawn the 'B' rating on the proposed USD300 million senior unsecured bond with a Recovery Rating of 'RR4', as the issuance did not materialise. The affirmation reflects Fitch's expectation that Dat Xanh will maintain a contracted sales scale of above VND4 trillion over the medium-term and that its leverage will remain comfortable. We believe the company will be able to access domestic banks to fund its operations and land banking needs, and that it will maintain adequate liquidity. Fitch has chosen to withdraw the ratings of Dat Xanh for commercial reasons. KEY RATING DRIVERS Slower, but Steady, Contracted Sales Growth: Fitch projects contracted sales to fall to VND5 trillion in 2022 (2021: VND6 trillion), before recovering to VND7 trillion in 2023. Dat Xanh has pushed back the launch of its major apartment project - Gem Riverside - to 4Q22 and 2023, resulting in a dip in our expectations for this year's contracted sales. In addition, Fitch expects mortgage-loan funded property sales, which represented 55% of contracted sales in 1H22, to soften amid rising interest rates and tighter lending to the sector following the State Bank of Vietnam's April 2022 decree. Fitch said, "However, we believe medium-term housing demand should be supported by an appetite for real estate as an inflation-hedge and store of value amid limited alternatives, along with Vietnam's steady economic growth and expanding urbanisation. Most of Dat Xanh's projects under development in the next two to three years will be located in Ho Chi Minh City and surrounds, including the provinces of Dong Nai and Binh Duong. Limited new supply, especially in Ho Chi Minh City, should support house prices and counterbalance headwinds." Negative Free Cash Flow: "We forecast free cash flow (FCF) gaps of around VND6 trillion in 2022 and VND5 trillion in 2023 due to land acquisitions and Gem Riverside construction. We factor in land purchases of VND2.5 trillion for 2022 and VND4 trillion for 2023, as the company expects to increase acquisitions this year. However, working capital outflow at Dat Xanh's brokerage business should ease in 2023 due to sector-wide moderating demand for property sales amid macroeconomic headwinds," Fitch said, Adequate Bank Access: Fitch said, "We expect Dat Xanh to be able to fund its operations through a combination of bank loans, local bonds and cash collections from contracted sales, even in the absence of international bond issuance. It managed to raise VND1.7 trillion of additional debt in 2Q22, despite tightening bank credit to the property sector, and had existing working relationships with more than 10 local banks as at June 2022. However, most of the debt is concentrated among a few lenders." Significant Landbank Provides Flexibility: The company estimates that its landbank is sufficient to support contracted sales for the next decade. This allows Dat Xanh to slow land acquisitions in periods of weak property sales to preserve liquidity. Fitch said, "We also think the company has the flexibility to delay the construction of Gem Riverside to 2023, as the project has not been launched. Dat Xanh's plans to raise VND4 trillion via a private equity placement in 4Q21 did not materialize, but it managed to maintain low leverage by reducing land acquisitions in 1H22." Balance Sheet Remains Healthy: Fitch said, "We expect Dat Xanh's net leverage to rise to around 35% in 2023, from 8% in 2021, as it undertakes more land acquisitions and major construction in the next two years. As such, the company should have sufficient leverage headroom to fund its growth aspirations in real-estate development and brokerage in the next one to two years, counterbalancing risks from negative FCF." DXG's moderate leverage, especially relative to international peers, is also supported by public and preferential equity issuances, which totaled VND3.9 trillion in 2016, 2019 and 2020. DERIVATION SUMMARY Dat Xanh's rating can be compared with that of Vietnamese developers BIM Land Joint Stock Company (BIML, B/Stable) and Phat Dat Real Estate Development Corp (PDR, B/Stable), as well as that of Indonesian property developers, PT Ciputra Development Tbk (CTRA, B+/Positive) and PT Lippo Karawaci TBK (B-/Stable). Dat Xanh, BIML and PDR are rated at the same level, as they have similar cash collection scale and net leverage. BIML's operating cash flow is generally positive due its largely pre-paid land, but this is counterbalanced by its portfolio exposure to tourism-related properties. CTRA is rated higher than Dat Xanh due to its sustained leading market position among Indonesian developers, with annual attributable contracted sales of more than USD300 million and mostly neutral operating cash flow. Dat Xanh, on the other hand, has a short record of maintaining contracted sales of around USD200 million and mostly negative operating cash flow. CTRA's rating is also supported by its exposure to non-development income from commercial properties, which provides additional financial flexibility. The Positive Outlook on CTRA reflects the possibility that the company could sustain higher presales over the medium term, which could lead to an upgrade. Lippo's rating reflects its weaker business and financial profile, despite similar contracted sales scale to Dat Xanh. Lippo has been generating negative FCF, even in the absence of land banking, although this has been on an improving trend in the last 12 months. However, we expect negative FCF in the next 12-18 months amid inflationary pressures and a rising interest-rate environment. We also expect Lippo's leverage to remain higher than that of Dat Xanh over the medium term, at around 45%-50%. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Contracted sales of VND5.0 trillion-7.5 trillion in 2022-2023 - EBITDA of VND2.0 trillion in 2022 and VND2.7 trillion in 2023 (2021: VND2.8 trillion) - FCF of negative VND5.9 trillion in 2022 and negative VND5 trillion in 2023 (2021: positive VND1.2 trillion) - Land banking of VND2.5 trillion in 2022 and VND3.9 trillion in 2023 - 40% cash dividend payout at the Dat Xanh Real Estate Services level KEY RECOVERY RATING ASSUMPTIONS - Fitch assumes Dat Xanh will be liquidated in a bankruptcy rather than continue as a going-concern, because it is an asset-trading company. - Fitch deducts 10% of the liquidation value on account of administrative costs. - Fitch has removed assets and debt attributable to the non- guarantor group when calculating recovery analysis. - Fitch assumed zero recovery value for cash and cash equivalents in arriving at the liquidation value, on the assumption that cash will dissipate as the company tends towards default. - To estimate the liquidation value, Fitch assumes a 75% advance rate against account receivables, in line with our assumption for south and south-east Asian property peers. Account receivables stem mainly from the development business, as well as deposits placed with third-party developer property projects undertaken by the brokerage business. - Fitch applies an advance rate of 50% against property inventories. Fitch has deducted the value of customer advances collected by the development-property business to exclude the portion of inventory that is deliverable against these advances. - Fitch said, "We assume a 50% advance rate for the brokerage arm's deposits for marketing and distribution, in line with the advance rate for property inventories. The brokerage arm is refunded the deposits upon the successful sale of 60%-70% of the project value, and in limited instances is able to take over the balance unsold inventory value of the project. Historical losses on account receivables are negligible." - Most of Dat Xanh's domestic bank debt is secured and ranks prior to unsecured debt in the liability waterfall. Dat Xanh has undrawn lines of VND6.5 trillion, but does not pay commitment fees on these lines, which it says is in line with local practice. Fitch has not regarded these lines as committed and has not assumed they will be available as the company tends towards default. These assumptions result in a 'RR1' Recovery Rate for the outstanding senior unsecured debt. Nevertheless, Fitch rates the senior unsecured debt at 'B' with a Recovery Rating of 'RR4' because Vietnam falls into Group D of creditor-friendliness under our Country-Specific Treatment of Recovery Ratings Criteria and the instrument ratings of issuers with assets in this group are subject to a soft cap at the company's IDR. RATING SENSITIVITIES Rating sensitivities are not applicable, as the ratings have been withdrawn. LIQUIDITY AND DEBT STRUCTURE Manageable Liquidity: Dat Xanh reported VND2.5 trillion in cash on its balance sheet as of end-June 2022 and VND3.2 trillion of debt maturing in the next 12 months. "We expect the company to spend another VND1.2 trillion on land purchase in 2H22 and that it will need to tap external sources to fund these payments and the construction costs of new projects. This should free up operating cash flow to manage its short-term debt maturities," Fitch said. ISSUER PROFILE Dat Xanh is a Vietnam-based real-estate development and brokerage company. It estimates to have sufficient land bank for around a decade of contracted sales as at end-June 2022. Its real-estate brokerage arm is one of the largest in Vietnam. Rating Prior ------ ----- Dat Xanh Group Joint Stock Company LT IDR B Affirmed B LT IDR WD Withdrawn B senior unsecured LT WD Withdrawn B ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***